Looking back on home furniture retailer stocks' Q1 earnings, we examine this quarter's best and worst performers, including RH (NYSE:RH) and its peers.
Furniture retailers understand that ‘home is where the heart is’ but that no home is complete without that comfy sofa to kick back on or a dreamy bed to rest in. These stores focus on providing not only what is practically needed in a house but also aesthetics, style, and charm in the form of tables, lamps, and mirrors. Decades ago, it was thought that furniture would resist e-commerce because of the logistical challenges of shipping large furniture, but now you can buy a mattress online and get it in a box a few days later; so just like other retailers, furniture stores need to adapt to new realities and consumer behaviors.
The 4 home furniture retailer stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 2.9%. while next quarter's revenue guidance was 4.7% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and home furniture retailer stocks have held roughly steady amidst all this, with share prices up 2.1% on average since the previous earnings results.
Weakest Q1: RH (NYSE:RH) Formerly known as Restoration Hardware, NYSE:RH (NYSE:RH) is a specialty retailer that exclusively sells its own brand of of high-end furniture and home decor.
RH reported revenues of $727 million, down 1.7% year on year, in line with analysts' expectations. It was a weak quarter for the company, with a miss of analysts' earnings and gross margin estimates.
RH pulled off the fastest revenue growth of the whole group. The stock is down 20.2% since the results and currently trades at $220.85.
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Best Q1: Williams-Sonoma (NYSE:WSM) Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE:WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.
Williams-Sonoma reported revenues of $1.66 billion, down 5.4% year on year, in line with analysts' expectations. It was a very strong quarter for the company, with an impressive beat of analysts' gross margin estimates.
The stock is up 2.5% since the results and currently trades at $322.
Sleep Number (NASDAQ:SNBR) Known for mattresses that can be adjusted with regards to firmness, Sleep Number (NASDAQ:SNBR) manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows.
Sleep Number reported revenues of $470.4 million, down 10.7% year on year, falling short of analysts' expectations by 0.8%. It was a weak quarter for the company, with a miss of analysts' earnings estimates.
Sleep Number had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 16.3% since the results and currently trades at $11.37.
Arhaus (NASDAQ:ARHS) With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ:ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.
Arhaus reported revenues of $295.2 million, down 3.1% year on year, surpassing analysts' expectations by 11.7%. It was a strong quarter for the company, with an impressive beat of analysts' earnings estimates and a solid beat of analysts' gross margin estimates.
Arhaus delivered the biggest analyst estimates beat among its peers. The stock is up 42.5% since the results and currently trades at $18.8.
